Airbnb becomes sponsor of 2016 Olympics in Rio

RIO DE JANEIRO (AP) — Rio de Janeiro's hotel bed shortage was eased on Friday, as online home share startup Airbnb inked a deal to be the official "alternative accommodations" sponsor of the 2016 Olympic games.

The deal, which saw Airbnb pay an undisclosed amount to local Olympic organizers, means official Olympic sites will feature a link to Airbnb's site and encourage spectators traveling to Rio for the games to use the service to rent space in private homes and apartments.

This marked the first time the Olympics has had an alternative accommodations sponsor, said officials with the local organizing committee.

Rio's notoriously poor hotel infrastructure has been long been considered a critical issue. When the city won the Olympic bid in 2009, it had just half the 40,000 beds required for the games. Since then, new infrastructure has been built, and the city now has the 42,000 spots needed to house members of the "Olympic family," including athletes and their entourages, the media and sponsors.

Airbnb's around 20,000 offerings in Rio — rooms, apartments, and houses scattered across the width and breadth of this chaotic seaside megacity — will be aimed primarily at Olympic visitors, officials said.

"When we started all that (Olympic bidding process) several years ago, the major problem was hotels. How are we going to host so many people," Sidney Levy, CEO of the Rio 2016 organizing committee, said at a news conference.

An initial plan to put people up aboard several cruise ships docked in waters off of downtown Rio fell largely flat, and the bankruptcy of Brazil's one-time richest man, Eike Batista, who was supposed to deliver restored hotels, only aggravated Rio's housing crunch. Owners of some pay-by-the-hour love motels received subsidies to help transform their establishments into conventional motels, but it didn't help much. During Pope Francis' 2013 visit to the city, the flocks of faithful slept largely in churches or on the floors of local schools.

Airbnb's chief product officer, Joe Gebbia, said Friday's deal would "make it possible for more people to attend Olympic games next year."

"We're ready for the expected 380,000 spectators who are coming to Rio for the Olympic games, and we're ready to show them what traditional, authentic Brazilian hospitality looks like," he said, adding that the sponsorship deal represented an "incredible opportunity for Rio residents to care for those visitors."

Gebbia, who co-founded Airbnb in San Francisco in 2008, said Rio has become one of the company's top destinations — after Paris, New York and London. During last year's World Cup, for example, around 100,000 international guests were hosted through the site, he estimated.

Although Gebbia mostly eschewed financial questions, focusing instead on the opportunity for intercultural understanding that can result from residents opening up their homes to foreign visitors, he said Rio-based users of the site averaged incomes of $4000 during the month-long World Cup.

The exorbitant price of accommodations in Rio during the soccer tournament became a hot-button issue after several European delegations announced they'd slashed the number of people attending the tournament in response to spiraling hotel prices. Asked whether Airbnb would be taking any measures to prevent price gouging during the Olympics, Gebbia responded that according to the rules of the site, it's up to the home owners to decide on pricing.

Fabio Nahon, a former businessman who now lives off income from the properties he lists on Airbnb as well as from managing some 20 other properties for fellow site users, hailed Friday's deal as "a strategic partnership that benefits everyone — visitors, owners, Airbnb and Rio's 'brand.'"

"I think the Olympics will help Airbnb gain even more legitimacy and that the Olympics really put Rio on the tourism map," he said at Friday' news conference, in a hall decked out with couches and coffee tables to resemble a living room.

Nahon added that his properties were fully booked during the World Cup, despite a 100 percent markup during the tournament.